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Infrastructure

Commenter (and friend) daretobepassionate asked me what my opinion was on government building infrastructure. I’ll be happy to answer:

The short answer is this: while I prefer private sector, I have no problem with government building infrastructure insofar as the building is required or useful. Building a bridge for the sake of building a bridge is neither useful nor beneficial to the economy.

Within the boundaries I’ve outlined before, government can build and maintain infrastructure and not be in violation of its duties. Roads are vital for national defense (you have to get troops to where they are needed quickly) and communication and power are always important.

I think there are also some economic benefits as well. The ability to travel long distances quickly without paying many tolls is certainly a plus. The roads could also be financed through a consumption tax (in this case, a gas tax), which would reduce the distortion of a tax on the economy.

But, as always, there is a question of quality. Take, for example, the Mass Bay Transit Authority’s (MBTA) performance over the past few weeks. The MBTA has been pounded: service has been delayed or canceled, trains facing major issues, and a total lack of resources to deal with said issues. Granted, the weather over the past few weeks has been usually bad (record setting, in fact), but the issues are still real: some of the MBTA’s equipment is from the 1940’s! Switches are frozen because nobody installed heaters on them. When was the last time you went into a store and their equipment was 70 years old? Or, for that matter 34 years old, the average age of the MBTA’s subway fleet? The MBTA is effectively protected from any form of competition and they do not need to turn a profit to survive, which means they have no incentive to upgrade and invest. Private firms do face such competition and must turn a profit to survive, so it is in their best interest to remain on the cutting edge.

Now, the MBTA story I told above is a single anecdote, but the issues the story raises about quality are found pretty much anywhere government decided to provide a service.

So, the tl;dr version: government can provide infrastructure, but, as with anything, care must be taken (and personally, I’d prefer it to stick with just roads).